Nov 25, 2019 · 34m · 20vc
20VC: Why The Best Entrepreneurs Are Cockroaches, What Everyone Underestimates About Customer Acquisition & What You Don't But Need To Know About Payback Periods with Josh Buckley, Founder & Chairman @ Mino Games
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Josh Buckley about his transition from teenage programmer to scaling Mino Games, navigating severe startup crises, mastering customer acquisition dynamics, and applying first-principles thinking to venture capital.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 36.5% of the talking time here. How this is scored →
Harry as informed peer 2.9 Guest teaching 2.6 Guest disagreement 1.0 Harry pushing back 1.6
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 25:26 Josh dismisses standard Silicon Valley received advice as BS
Josh firmly rejects conventional startup wisdom, arguing that most general advice is contextual noise based on a sample size of one.
Hardest push from Harry ▶ 17:10 Harry defends his frustration with early-stage CAC questionsHarry refuses to accept pushback he received on Twitter, arguing forcefully that asking pre-seed founders for predictable CAC/LTV data is absurd.
Biggest teaching moment ▶ 15:48 Josh explains the mechanics of CAC saturation and CPM inflationJosh educates the host on underlying growth dynamics, explaining how internal user saturation and compounding 40% annual algorithm CPM increases impact unit economics.
Harry holds his own ▶ 13:40 Harry cites Bill Gurley to question venture capital oversupplyHarry demonstrates deep industry insight by bringing up Bill Gurley's macro thesis on capital oversupply to challenge Josh on fundraising strategy.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Podcast Audio Sting and Opening Question | 1 | 1 | 0 | 0 | Harry opens with an enthusiastic introduction and prompts Josh to tell his career origin story. Josh responds with an extended, friendly narrative about teaching himself to code at age 12, selling a game at 15, and joining Y Combinator. | |
| Surviving the Trough of Sorrow: Why Entrepreneurs Must Be Cockroaches | 2 | 2 | 0 | 1 | Harry asks Josh to unpack his 'cockroach' analogy for founders, prompting Josh to detail Mino Games' struggle through the trough of sorrow and moving to Montreal. Harry briefly interrupts to ask a poignant personal question about dealing with extreme pressure at a young age. | |
| Non-Dilutive Growth Strategy and the Oversupply of Venture Capital | 4 | 3 | 1 | 2 | Harry challenges why Josh did not raise massive equity capital during good times and invokes Bill Gurley's quote regarding the oversupply of venture capital. Josh agrees with Gurley's thesis, explaining why Mino took venture debt instead and how capital oversupply spoils young founders. | |
| Customer Acquisition Saturation, Channel Diversification, and Payback Periods | 5 | 4 | 2 | 3 | Harry leads an in-depth discussion on CAC, sharing his tweet criticizing pre-seed investors who demand CAC/LTV metrics and questioning channel mortality rules. Josh nuances Harry's tweet by defending investor intent while detailing CAC saturation and payback period growth. | |
| Balancing Angel Investing with Operating and Unpacking Hot Deals | 3 | 3 | 1 | 2 | Harry explores the duality of operating while angel investing and questions whether SV 'hot deals' correlate with top-performing companies. Josh explains his portfolio data disproving that deal heat equals success. | |
| Evaluating Advice, Testing Inversion, and Bucking Silicon Valley Conventions | 3 | 3 | 2 | 2 | Harry confronts Josh with a prior quote that most startup advice is BS. Josh expands on his contrarian stance, advocating for the inversion of received wisdom and citing Clearbit CEO Alex MacCaw as a model of non-conventional thinking. | |
| Quickfire Round: Books, Strengths, Game Mechanics, and Silicon Valley | 2 | 2 | 1 | 1 | Harry conducts a quickfire round covering favorite books, personal weaknesses, and game mechanics. Josh offers candid feedback on Silicon Valley's lack of diversity of thought and echo-chamber culture. |
Statements from this episode (15)
Josh Buckley sold his teenage virtual world game for six figures
“I actually agreed one day to sell it to a company in Texas for six figures at the time.”
Mino Games became one of Andreessen Horowitz's best seed investments
“We became one of Andreessen Horowitz's best seed investments.”
Montreal's cost of living was 4-5x lower than San Francisco in 2016
“The cost of living was four or five times lower than San Francisco, and then we had these amazing tax credits from the government.”
Mino Games raised $30M in debt to scale after validating unit economics
“A couple of months ago we did that. So we validated a new game. The unit economics were incredibly favorable to us, and we decided to bring on about thirty million dollars in debt to allow us to scale to the next stage of the business”
Easy funding environments create founders who act like spoiled rich kids
“Many new founders today only know the funding environment like this. It's almost like being a spoiled rich kid born into a rich family. Sometimes it can really help to go through the struggle of struggling to actually you know, make your payroll, et cetera. I …”
Mino Games spends tens of millions of dollars annually on marketing
“We spend tens of millions a year at Minnow on marketing, and the one thing that we've seen ourselves and other companies and investors underestimate is how CAC saturates.”
Digital advertising CPMs compound at approximately 40% per year
“The second force at play is essentially the market-wide, the CPMs are just compounding. The number we've seen is about 40% a year, and that's just because of a number of factors around the algorithms of new competitors coming into the market.”
Pre-seed CAC and LTV metrics are meaningless without seven-figure ad spend
“In general, I would agree with you that both the data around CAC and LTV is far too early at the pre-seed stage. I think until you've started to kind of push more than seven figures of scale between both the CAC and LTV metrics, you really don't know those num…”
Every digital ad platform update makes user acquisition more expensive
“There's never been a single update in digital advertising that has made buying cheaper. The advertising algorithms on these major platforms like Facebook and Google are getting hyper-efficient, and every update just makes them more expensive.”
Customer acquisition payback periods double for every $5M in ad spend
“The reason why your payback period grows as you spend more is essentially that you're exhausting the most relevant people or customers for your business... And benchmarks we've heard thrown around are roughly doubling every five million in spend.”
Founders should avoid angel investing before achieving product-market fit
“Generally, I would advise against doing so. I think it's great if you have opportunities to do so. And if you have the capital, when you have the deals in front of you, I think it's absolutely worth doing. What I'd advise against is splitting your focus too mu…”
Josh Buckley's most successful angel investments struggled to raise seed funding
“I was looking at my own portfolio and actually found that many of my most successful deals were actually not very hot at the seed stage. It was actually a struggle for them to raise their first rounds.”
Most startup advice is highly contextual with a sample size of one
“Advice alone is just completely contextual. It's like a sample size of one person's personal experience of what worked or didn't work for them”
Top consumer app mechanics originate in video games 5-10 years prior
“A lot of the consumer mechanics we see today at the top of the apps Store or top of consumer businesses were started in successful games maybe five or 10 years ago.”
The best investor updates are sent monthly on a rigid schedule
“Some of the best investor updates I see are in a monthly cadence. They really kind of keep it on a rigid schedule and they have the key numbers. They have the trends around those numbers and they have the goals. They also have the highlights and lowlights arou…”